MM Forgings
MM Forgings, is a Tamil Nadu based company and its numbers for the first quarter were very flat. Net sales were at Rs.121.59 crore v/s Rs.121.30 crore (YoY). Total expenses also came at Rs.106 crore. The only difference was the higher other income – in current Q1 it came in at Rs.1.15 crore v/s Rs.40 lakh in previous Q1. There was also an additional charge of deferred tax in current Q1 of Rs.25 lakh and that changed the bottomline slightly – net profit was at Rs.12.92 crore v/s Rs.13.24 crore, a fall of around 2.5%. Thus a lackluster Q1 but things seasonally get better from Q2, lets see how that fares in coming months.
The company, in 1946 started operations as ‘ The Madras Motors Ltd’, importing and distributing products of Royal Enfield Motors from UK. It started manufacture of forgings in 1974, stopping the Royal Enfield dealership. It caters to auto , engineering and oil industries; is amongst the largest forgings exporters with more than 70% of its income coming from exports. A consistent performer, the company is liberal when it comes to bonus (two bonuses in 9 years) and dividends. Improvement in demand from US and Europe will boost earnings and so will demand uptick from domestic market. Promoters as at 30th June, 2015 hold 56.41% stake and FIIs hold 3.28%. Domestic institutions hold 9.87% stake.